Market Integration of Distributed Resources Through Coordinated Frequency and Price Droop

Given the appropriate control strategies and market rules, distributed energy resources (DER) organized into microgrids have the potential to be active participants in regional energy and ancillary services markets. This paper integrates a price-based control mechanism into the conventional frequency droop control mechanism to present an integrated droop-based control framework that could facilitate greater DER penetration in the power system and electricity markets. The proposed control framework makes use of the concept of “price droop”, and introduces the idea of a “system frequency elasticity”. These two concepts combine the power system control concept of frequency droop and the economic concept of own price elasticity. The framework consists of a centralized agent-based learning process and a decentralized operational response. The applicability of the proposed control mechanism is demonstrated through a series of case studies. Results highlight the need to consider the dynamics of the existing system in the design of new technical and market strategies to allow for the integration of DER and microgrids into the power system.